What will this place actually rent for? If you are eyeing a home or condo in Santa Rosa Beach, that question often decides the deal. You want a clear, realistic projection you can trust, not a back‑of‑the‑napkin guess. In this guide, you will learn how to build a month‑by‑month rental forecast, what expenses to include, how local rules affect returns, and how to stress test your numbers before you buy. Let’s dive in.
Why projections matter here
Santa Rosa Beach sits in Walton County within the South Walton vacation market, which includes places like Seaside, Grayton Beach, and Miramar Beach. It is a leisure‑driven market with strong demand for single‑family beach houses, condos, and planned communities.
Demand is highly seasonal. Peak season runs late spring through summer, with added spikes around spring break, fall events, and winter holidays. That seasonality affects both occupancy and average daily rate, so a useful model needs to be monthly, not a flat annual average.
Visitor patterns are influenced by beach and nature tourism, family travel, regional drive markets, and event calendars. Airport access and drive times also shape weekend versus weeknight demand. To build a reliable forecast, you should gather monthly context from local tourism sources and actual rental histories when available.
Choose your rental strategy
Your revenue and cost profile will differ based on how you plan to rent.
Short‑term vacation rentals
Short‑term rentals are typically booked by the night or week. Revenue depends on average daily rate, occupancy, minimum stays, and fees. Costs include frequent cleanings, guest supplies, higher utilities, and property management that often ranges from 18 to 30 percent of gross revenue. Cleaning fees are often passed to guests, but they still affect booking decisions.
Medium‑term and seasonal
These are weekly or monthly furnished stays, often heavier in peak months or winter for snowbirds. Turnover is lower than nightly STRs, but you will still carry higher utilities and maintenance than a year‑round lease. Pricing is usually by week or month.
Long‑term leases
Long‑term rentals are typically 6 to 12 months or more. Rents are steadier with lower turnover costs. Management fees often range from 8 to 12 percent of collected rent, and tenants may pay some utilities. Returns are usually more stable but lower than a successful STR.
Build a month‑by‑month model
Follow a practical, repeatable process to avoid over‑ or under‑estimating revenue.
1) Define the plan
Decide on STR, seasonal, or LTR. Set minimum stays, furnishings, pet policy, and who you aim to host. Your strategy should match any HOA rules and your lender’s requirements.
2) Gather comps that match
For STRs, identify 8 to 12 comparable properties in the same community or nearby with similar bedrooms, proximity to the beach, amenities, and condition. Record monthly rates, current calendars, and fees. For LTRs, collect recent leased rents and days on market from local managers and verified MLS history when possible.
3) Estimate ADR and occupancy by month
Do not use a single annual rate. Estimate average daily rate and occupancy for each month based on multiple sources, including live listing samples, STR market analytics, and local property manager input. Adjust asking rates downward to reflect discounts and unbooked nights.
4) Calculate gross income
Use a calendar approach. For each month: Gross income = average daily rate × nights in month × occupancy rate. For long‑term, use monthly rent times months rented and include expected vacancy.
5) Subtract operating expenses
Build a detailed expense schedule that fits your property type. For STRs, include platform fees, cleaning per stay, utilities, supplies, HOA, property taxes, insurance, maintenance, and management. The result after expenses is your Net Operating Income.
6) Layer in financing
Add your annual debt service based on loan amount, rate, and term. This yields a cash flow figure you can compare across scenarios.
7) Track key metrics
- Cap rate = Net Operating Income ÷ purchase price.
- Cash‑on‑cash = (Net Operating Income − annual debt service) ÷ cash invested.
- Break‑even occupancy = (annual fixed costs + annual debt service) ÷ (ADR × 365 − variable cost per occupied night).
Expenses to budget in Santa Rosa Beach
Make conservative estimates and verify with local quotes. Coastal properties often carry higher maintenance and insurance.
- Management: STR 18 to 30 percent of gross, LTR 8 to 12 percent.
- Cleaning and turnover: per stay costs vary by size and finish level. Plan for periodic deep cleaning and linen replacement.
- Utilities: electricity, water, internet, streaming or cable, and trash. STRs typically carry these and it can total 5 to 15 percent of gross.
- Maintenance and repairs: a common planning range is 5 to 10 percent of gross annually, often higher along the coast.
- HOA fees: condos and planned communities may include reserves and common utilities.
- Insurance: homeowners or landlord, plus wind or hurricane coverage. Flood insurance may be mandatory with a mortgage in FEMA flood zones.
- Property taxes and special assessments: confirm millage and any assessments with the county.
- Platform or booking fees and marketing spend: consider listing fees and any direct‑booking tools.
- Capital reserves: set aside 5 to 10 percent of gross or a fixed annual amount for roof, HVAC, and appliances.
Taxes and compliance basics
Florida has no personal state income tax, which affects after‑tax returns compared to other states. Short‑term stays are usually subject to state sales tax and local transient rental taxes. In Walton County, tourist development taxes apply. Platforms may collect and remit some taxes for you, but you are responsible for ensuring accurate registration and remittance.
Check the latest Walton County requirements for vacation rental registration, business tax receipts, and remittance rules. HOA covenants may set minimum stays, guest limits, or registration steps. Rules can change, so confirm with county sources, your HOA documents, and a local attorney if needed.
Insurance and coastal risk
Wind and hurricane exposure can increase insurance premiums and create coverage exclusions. Flood coverage may be required if the property lies in a designated flood zone and you use financing. Some carriers have limited appetite in coastal Florida, so obtain quotes early in your process for hazard, wind, and flood. Your lender will likely require certain coverages, and the premiums can materially change your cash flow.
Scenario planning that works
Do not rely on one number. Model three cases:
- Conservative: reduce ADR and occupancy by 20 percent vs the median of your comps.
- Base case: use the median comp data and local manager guidance.
- Optimistic: increase ADR or occupancy by about 10 to 15 percent, or add direct bookings.
Also run a stress test for a poor weather season or slower economic year. Calculate your break‑even occupancy so you know the minimum booked nights needed to cover fixed costs and debt service.
Local data and who to call
- Tourism and trends: Walton County Tourist Development Council and Visit South Walton provide visitor counts and bed tax trends that help you gauge seasonality.
- County property appraiser: check assessed values to estimate property taxes and confirm millage rates.
- Flood and hazard: FEMA flood maps and Walton County floodplain maps identify flood zone requirements tied to insurance.
- Local property managers: get realistic monthly occupancy, rate guidance, cleaning pricing, and maintenance expectations.
- Lending: talk with mortgage brokers who regularly close Florida coastal vacation rentals, including DSCR or investor loans if you plan to operate as a rental business.
- Tax and legal: consult a CPA experienced with rental real estate and a local attorney for HOA and county rules.
Buyer checklist before you offer
Use this quick list to keep your underwriting tight.
- Obtain 12 to 24 months of verified rental income statements if the property has rental history. Ask for platform statements, manager P&Ls, and occupancy reports.
- Pull STR comps from the same community or street. Combine live listing samples, analytics, and manager input for monthly ADR and occupancy.
- Get written confirmation of HOA rental rules, minimum stays, occupancy limits, and any registration steps.
- Confirm county registration and transient tax requirements and who remits taxes under your setup.
- Secure insurance quotes for hazard, wind, and flood based on the specific property and elevation.
- Verify property tax estimates using the county appraiser and recent millage rates.
- Build monthly models for conservative, base, and optimistic cases with a break‑even occupancy calculation.
- Speak with a mortgage broker familiar with second‑home, investment, or DSCR loan options for South Walton.
- Review entity structure, depreciation, and passive activity rules with a CPA.
Putting it all together
A strong Santa Rosa Beach rental projection is monthly, conservative, and grounded in local data. Start with a clear strategy, gather true comps, budget all coastal expenses, and pressure‑test your numbers with scenarios. If you want help building a model tailored to a specific home or condo, we can walk you through the numbers, connect you with trusted local managers, and align financing with your plan.
Ready to underwrite your next 30A or South Walton purchase with confidence? Connect with Katie Atwater and Mike Henderson for a tailored rental projection and on‑the‑ground guidance.
FAQs
How should Santa Rosa Beach buyers estimate short‑term rental income?
- Build a monthly model using comparable listings, market analytics, and local manager input, then adjust for discounts and unbooked nights.
Are short‑term rentals allowed in Santa Rosa Beach and Walton County?
- STRs are common, but legality depends on county rules, zoning, and HOA covenants. Confirm registration and tax obligations before you buy.
What expenses are easy to miss in coastal Florida rental projections?
- Wind and flood insurance, higher summer utilities, linen replacement, deep cleanings, and capital reserves for roof and HVAC.
How accurate are Airbnb or VRBO listing prices for forecasts?
- They show asking rates, not booked rates or occupancy. Use them with market analytics and verified manager statements for realistic revenue.
What loan options work for vacation rentals in South Walton?
- Options range from second‑home and investment loans to DSCR investor loans. Lenders treat projected income differently, so talk with an experienced broker.
How can I stress test a Santa Rosa Beach rental investment?
- Run conservative, base, and optimistic cases, then add a stress year with lower ADR and occupancy. Calculate break‑even occupancy to know your floor.
